MCQ Remuneration to partners - Partnership accounts
This quiz on the remuneration to partners with 20 practice questions. Test your knowledge about the concepts of remuneration to partners like salary to partners and partner commission, their accounting entries and treatment in profit and loss appropriation account The quiz suits well for conceptual clarity for your board exams
CBSE MCQ class 12 accounts
The below MCQ test is designed as per the latest syllabus prescribed by CBSE board. With the rise in weightage of MCQ questions, the practice of MCQ questions becomes very important. The quiz is equally useful for students of CUET exams.
How to attempt the quiz
One by one go through the below questions and select the right option. Do all the questions and in the end press submit. Instantly you will get your score and the explanation against each question. Go through your mistakes and reattempt the quiz any number of times as needed.
MCQ Quiz - Practice Questions
MCQ Quiz
Question 1
Remuneration to partners includes:
A
Correct Answer: Salary and commission
Remuneration to partners includes salary, commission, or both as agreed in the Partnership Deed.
Question 2
Salary or commission to partners is allowed:
A
Correct Answer: Only if Partnership Deed provides for it
Salary or commission to partners is allowed if Partnership Deed provides or is orally agreed between/among partners.
Question 3
In absence of Partnership Deed, salary to partners is:
B
Correct Answer: Not allowed
Salary or remuneration is not allowed to partners in absence of Partnership Deed as per Partnership Act, 1932.
Question 4
The nature of salary to partners is:
C
Correct Answer: An appropriation of profit
Salary to a partner is not a charge against profit but is an appropriation of profit allowed if deed permits and firm has profit.
Question 5
Salary to partners is allowed only when:
A
Correct Answer: Firm has earned profit or has distributable profit
Salary to partners is an appropriation of profit, so it is allowed only if firm has earned profit or has distributable profit.
Question 6
Salary to partners is transferred to:
C
Correct Answer: Debit of P&L Appropriation Account
Salary to partners is an appropriation of profit, transferred to the debit of Profit & Loss Appropriation Account.
Question 7
Commission to partners may be calculated as:
A
Correct Answer: Percentage of net profit or net sales
Commission payable to a partner may be stated as percentage of profit (before or after commission) or net sales, or fixed amount.
Question 8
Commission as percentage of net profit before charging commission is calculated as:
A
Correct Answer: Net Profit × Rate of Commission / 100
Commission as percentage of net profit before commission = Net Profit × Rate of Commission / 100.
Question 9
Commission as percentage of net profit after charging commission is calculated as:
B
Correct Answer: Net Profit × Rate / (100 + Rate)
Commission as percentage of net profit after commission = Net Profit × Rate of Commission / (100 + Rate of Commission).
Question 10
Commission as percentage of net sales is calculated as:
B
Correct Answer: Net Sales × Rate / 100
Commission as percentage of net sales = Net Sales × Rate of Commission / 100.
Question 11
If firm incurs loss, salary to partners is:
C
Correct Answer: Not allowed as it's an appropriation
Salary to partners is an appropriation of profit. If firm incurs loss or has no distributable profit, it is not allowed.
Question 12
Journal entry for allowing salary to partners is:
A
Correct Answer: Dr. Partners' Salary Ac, Cr. Partners' Capital/Current Acs
Adjusting Entry: Dr. Partners' Salary Ac, Cr. Partners' Capital/Current Acs (Individually). Salary allowed to partners.
Question 13
Transfer entry for salary to partners is:
B
Correct Answer: Dr. P&L Appropriation Ac, Cr. Partners' Salary Ac
Transfer Entry: Dr. P&L Appropriation Ac, Cr. Partners' Salary Ac. Salary transferred to P&L Appropriation Account.
Question 14
Difference between salary to partners and manager's salary:
B
Correct Answer: Partner's salary is appropriation, manager's salary is charge
Partner's salary is an appropriation of profit. Manager's salary is a charge against profit payable whether firm earns profit or loss.
Question 15
Commission to partners is recorded in:
C
Correct Answer: P&L Appropriation Account as appropriation
Commission to partners is an appropriation of profit, recorded in the debit of P&L Appropriation Account.
Question 16
Salary to partners is usually stated as:
A
Correct Answer: An amount per month or per year
Salary payable to each partner is normally stated as an amount (per month or per year) in the Partnership Deed.
Question 17
When both salary and commission are payable to a partner:
B
Correct Answer: Both can be allowed as per Partnership Deed
Both salary and commission can be allowed to a partner if provided in Partnership Deed and firm has distributable profit.
Question 18
If salary to partners is specified as 'charge' in Partnership Deed:
C
Correct Answer: It is transferred to P&L Account and paid even if loss
If salary to partners is specified as charge against profit, it is transferred to debit of P&L Account and allowed even if firm incurs loss.
Question 19
Priority of payment between salary to partners and interest on loan by partner:
A
Correct Answer: Interest on loan has priority as it's a charge
Interest on loan by partner is a charge (allowed before net profit). Salary is appropriation (allowed after net profit).
Question 20
Remuneration to partners is credited to:
B
Correct Answer: Partner's Capital/Current Account
Remuneration (salary/commission) to partners is credited to Partner's Capital Account (Fluctuating) or Current Account (Fixed Capital Method).
